Millions of Americans are on the hook for a monthly student loan payment. And those payments can get in the way of a lot of goals.
For some people, paying off student loans could mean not having extra money to put toward retirement savings. For others, it could mean having to put plans to buy a home on hold.
Meanwhile, the average federal student loan balance this year is $37,338. And if you have a balance in that ballpark, the idea of paying off your debt might seem daunting. But here's how you can whittle your loan balance down to $0 in relatively short order.
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1. Stick to the standard repayment plan
Federal student loan borrowers can choose from different repayment plans. There are some that base your monthly payments on your income, and there's also an extended repayment plan that has you making lower payments each month but carrying your debt for a longer period of time.
If you're eager to pay down your debt as quickly as possible, resist the urge to apply for one of these repayment plans. Instead, stick to the standard repayment plan, which generally has a 10-year payoff. That way, you might accrue less interest, which could make it easier to shed that debt for good.
2. Turn to the gig economy for extra money
You may want to rid yourself of student loans as quickly as possible. Even if you're looking at a large loan balance, boosting your income with a second job could make that goal more than doable.
The average monthly student loan payment today is $337. But what if you're able to earn $700 a month from a side hustle? In that case, you might be in a position to use that extra money to cover not just your standard monthly payment, but the equivalent of an extra payment every month.
3. Move back home for a period of time to free up cash
If you're a fairly recent graduate who's stressed about the idea of repaying a pile of loans, you may want to make a pit stop on the road to full-fledged adulthood -- moving back home for a year or two. If your parents are amenable to that arrangement and have the space, living at home for a brief period of time could make it so you're able to allocate a huge portion of your paycheck to your student loan balance.
In fact, let's say rent in your area typically costs $1,000 a month for a shared apartment. Living at home might save you $1,000 that can go toward your student loans. That would basically make it possible for you to make your monthly payment times three if yours is similar to the average borrower's today.
The idea of carrying student debt can be stressful and aggravating. And you may be eager to lose that debt as quickly as you can possibly can. These strategies could be your ticket to paying off your student loans once and for all so you can enjoy the benefits of having a degree without a series of nagging monthly payments.
